I saw some offline retail store or online retail store sell OEM Version of Operating System.
Is it legal for them to do that or what?
Thanks for reading this.

Hi It is if they are selling you hardware as well (A PC)

What if they sell it with ANY kinds of hardware?

I guess the laws may vary from country to country and different software packages but the general rules are. Some of the others in the forum may have more advice.

OEM can be used as an adjective to describe software licensed only for a particular system. OEM software is purchased alongside a system or hardware parts. OEM software is often cheaper than the full versions but not as cheap as academic or student editions.
OEM hardware is hardware packaged for computer administrator and builder use. These products are normally plain boxed and often don't come with any instructions or references provided in retail packages. Technical support for such "OEM products" is usually the responsibility of the reseller, rather than of the manufacturer. OEM hardware is also called bulk hardware.

[edit] Operating systems

There are two types of OEM when it comes to operating systems. The first is when a pre-built computer is purchased, there is an OEM disk that comes with the system, which can not be transferred to another one, because that disk is designed to run only with the specific system components. The second type of OEM operating system is one that can be transferred to any other system, without the dependence on the components.

No, not unless it comes with a PC.

Mmmmmm I belive that is illegal.

OEM usaly is supplied with a new computer or computer manufacturers have OEM to be used multiple times.

This actually is a though subject.

The principle behind OEM software is that you buy a PC with an operating system preinstalled. You then buy an OEM license. They do not even provide you with the installation disk, and thats not necessary. In return, the price for the license is alot cheaper too.

However, there's the other side too, getting the OEM CD's.

Say, you're a pc mechanic, and you sell PC's with an operating preinstalled on them, you need to install them with something right? You can buy an OEM cd for that purpose.

I build my own systems whenever I need a new pc, and I was able to buy an OEM cd because my pc is custom build. I'm not sure if thats illegal, but it is illegal to use an OEM cd if you buy a pc from a brand.

I hope that clarifies enough.